How the Treasury Is More Powerful Than the Fed: Allison Schrager

Decisions made by the Treasury get much less attention than those made by the Federal Reserve, but they can be even more consequential for interest rates — and the entire US economy.

A case in point is the current debate over the maturity of the bonds and bills the Treasury sells at auction. An influential report published last month argued that the Treasury is issuing too much short-term debt, undermining the Fed’s efforts to slow down the economy. Then former Treasury Secretary Steve Mnuchin said earlier this month that the Treasury should discontinue the 20-year bond because of lack of ...